The creation of a trust can be beneficial in estate planning for persons in all walks of life. While many consider a trust to be a tool reserved for people with very large estates, the truth is that a trust may also be a good choice for people with more moderate assets, according the National Association of Financial and Estate Planning.
There are many situations in which a trust may be beneficial. For example, business owners, art collectors, and individuals holding a sizable amount of real estate who desire for their assets to be distributed among particular heirs may find that a trust is conducive to their wishes. Furthermore, for individuals who want their estates to be inherited according to a specific timeline and other specifications, a trust might be the appropriate mechanism.
In addition, trusts provide several tax benefits for estates. They eliminate the necessity for an estate to be probated by the court and may thus prove to be a money-saving measure. Moreover, they may offer some protection from creditors and lawsuits.
There are several different kinds of trusts. For example, there are credit-shelter trusts, qualified personal residence trusts, irrevocable life insurance trusts, qualified terminable interest property trusts and generation-skipping trusts. Each type offers certain distinct benefits for the owner of the trust as well as the beneficiary, such as specific tax benefits and distribution options.
Trusts are complex legal agreements. Thus, they require, at the very least, a basic understanding of Nevada laws related to estate planning. An attorney with a background in this field may assist individuals in determining which type of trust, if any, is most apt for their particular situation.
Source: CNN Money, “Estate planning: Is a trust beneficial?“, November 16, 2014